Worksheet 12.1: Elements of Consideration & Adequacy of Consideration

2. Consideration is the given in exchange for a promise. A contract cannot be formed without consideration.

1. Value 2. Sufficient

5. Drag and drop the appropriate words to complete the following: Something of legally sufficient value may consist of the performance of an action that one is otherwise not obligated to undertake. Something of legally sufficient value may consist of the refraining from an action that one has a legal right to undertake (called a forbearance).

1. obligated 2. refraining

10. Something must be of established market value to be considered legally sufficient consideration.

F

4. Something of legally sufficient value may consist of a promise to do something that one has no legal duty to do.

Prior

1. Consideration can be defined as

Something of value given in exchange for a promise

6. Carmen agrees to cook twenty dinners for Hal. In exchange, Hal will repair all of the plumbing in Carmen's house. Carmen has offered legally sufficient consideration because Carmen has promised something of value.

T

9. Something does not have to be of direct economic or financial value to be considered legally sufficient consideration.

T

2. Bargained-for exchange—There must be a bargained-for

exchange.

1. Legal value—Something of legally sufficient value must be given in exchange for a promise. This may consist of a promise, a

forbearance, or a performance

7. The second element of consideration is that it must provide the basis for the bargain, so the item of value must be given or promised by the promisor in return for the promisee's:

a. promise, performance, or promise of performance

11. Shockingly inadequate consideration can indicate the existence of what exceptions? Choose three:

b. undue influence, c. duress and e. fraud

8. Dewitt tells his daughter that, "In consideration of the fact that you are not as wealthy as your sisters, I'm going to give you $100,000." Is the element of bargain-for exchange evident here?

c. No, because in fact no consideration has been given.